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Liberty (LBRT) Q2 Earnings and Revenues Miss Estimates
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Liberty Energy Inc. (LBRT - Free Report) reported second-quarter 2023 earnings of 87 cents per share, which missed the Zacks Consensus Estimate of 90 cents. The bottom line also outperformed the year-ago quarter’s figure of 55 cents. This improvement can be primarily attributed to strong equipment and services execution and higher activity in the reported quarter.
Revenues totaled $1.2 billion, which missed the Zacks Consensus Estimate (by 5.1%). The figure, however, beat the prior-year quarter’s level of $942.6 million by 26.8%.
The Denver-CO-based oil and gas equipment company’s adjusted EBITDA was $311.4 million compared with $196.1 million reported in the year-ago quarter. The figure is also higher than our projection of $287.4 million.
Liberty’s board of directors announced a cash dividend of 5 cents per common share, payable on Sep 20, 2023, to stockholders of record as of Sep 6, 2023.
As part of its shareholder return policy, LBRT repurchased shares worth $60 million at an average price of $12.71 per share.
Liberty Energy Inc. Price, Consensus and EPS Surprise
Liberty reported total costs and expenses of $988.5 million in the second quarter, up from the year-ago quarter’s $832 million. The figure is lower than our projected level of $1,104.4 million.
Balance Sheet & Capital Expenditure
As of Jun 30, LBRT had approximately $31.7 million in cash and cash equivalents. Its long-term debt of $288 million represented a debt-to-capitalization of 14.7%. The company’s liquidity, cash balance plus revolving credit facility, amounted to $226 million.
Liberty spent $151.7 million on its capital program in the reported quarter compared with $127 million in the year-ago period. The figure, however, missed our prediction of $158.8 million.
Guidance
The company expects frac fleet demand to follow rig count trends and remain stabilized in the second half of 2023. LBRT plans to accelerate completion activity. It expects Exploration and production (E&P) operators to benefit from lower well costs. Natural gas markets may not see an increase in activity until 2024, owing to an anticipated rise in LNG and Mexico exports.
Liberty expects that the supply cuts by OPEC+ and the reduction in global oil inventories will have a positive impact on global oil markets. The outlook is supported by a slowdown in production growth, a drop in oil inventories and a shift in focus toward replenishing strategic petroleum reserves in the United States.
Despite recessionary risks, the demand for oil remains resilient due to factors like pre-Covid travel trends, robust demand from India and emerging market strength. Underinvestment in global production capacity supports a resilient multi-year cycle for oil and gas.
However, the company thinks that the consolidated industry is better equipped to handle the near-term softness in completion activity by reducing fleet counts. The idea is to balance the market and protect margins.
Evolution Petroleum is worth approximately $273.80 million. EPM currently pays a dividend of 48 cents per share, or 5.38% on an annual basis.
The company currently has a forward P/E ratio of 7.62. In comparison, its industry has an average forward P/E of 11.90, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.93 billion. In the past year, its shares have risen 17.5%.
MUSA currently pays a dividend of $1.52 per share, or 0.48% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $497.37 million. In the past year, its units have risen 167.4%.
The partnership currently has a forward P/E ratio of 4.33. In comparison, its industry has an average forward P/E of 15.80, which means NGL is trading at a discount to the group.
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Liberty (LBRT) Q2 Earnings and Revenues Miss Estimates
Liberty Energy Inc. (LBRT - Free Report) reported second-quarter 2023 earnings of 87 cents per share, which missed the Zacks Consensus Estimate of 90 cents. The bottom line also outperformed the year-ago quarter’s figure of 55 cents. This improvement can be primarily attributed to strong equipment and services execution and higher activity in the reported quarter.
Revenues totaled $1.2 billion, which missed the Zacks Consensus Estimate (by 5.1%). The figure, however, beat the prior-year quarter’s level of $942.6 million by 26.8%.
The Denver-CO-based oil and gas equipment company’s adjusted EBITDA was $311.4 million compared with $196.1 million reported in the year-ago quarter. The figure is also higher than our projection of $287.4 million.
Liberty’s board of directors announced a cash dividend of 5 cents per common share, payable on Sep 20, 2023, to stockholders of record as of Sep 6, 2023.
As part of its shareholder return policy, LBRT repurchased shares worth $60 million at an average price of $12.71 per share.
Liberty Energy Inc. Price, Consensus and EPS Surprise
Liberty Energy Inc. price-consensus-eps-surprise-chart | Liberty Energy Inc. Quote
Costs and Expenses
Liberty reported total costs and expenses of $988.5 million in the second quarter, up from the year-ago quarter’s $832 million. The figure is lower than our projected level of $1,104.4 million.
Balance Sheet & Capital Expenditure
As of Jun 30, LBRT had approximately $31.7 million in cash and cash equivalents. Its long-term debt of $288 million represented a debt-to-capitalization of 14.7%. The company’s liquidity, cash balance plus revolving credit facility, amounted to $226 million.
Liberty spent $151.7 million on its capital program in the reported quarter compared with $127 million in the year-ago period. The figure, however, missed our prediction of $158.8 million.
Guidance
The company expects frac fleet demand to follow rig count trends and remain stabilized in the second half of 2023. LBRT plans to accelerate completion activity. It expects Exploration and production (E&P) operators to benefit from lower well costs. Natural gas markets may not see an increase in activity until 2024, owing to an anticipated rise in LNG and Mexico exports.
Liberty expects that the supply cuts by OPEC+ and the reduction in global oil inventories will have a positive impact on global oil markets. The outlook is supported by a slowdown in production growth, a drop in oil inventories and a shift in focus toward replenishing strategic petroleum reserves in the United States.
Despite recessionary risks, the demand for oil remains resilient due to factors like pre-Covid travel trends, robust demand from India and emerging market strength. Underinvestment in global production capacity supports a resilient multi-year cycle for oil and gas.
However, the company thinks that the consolidated industry is better equipped to handle the near-term softness in completion activity by reducing fleet counts. The idea is to balance the market and protect margins.
Zacks Rank and Key Picks
Currently, LBRT carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum (EPM - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Murphy USA (MUSA - Free Report) and NGL Energy Partners (NGL - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is worth approximately $273.80 million. EPM currently pays a dividend of 48 cents per share, or 5.38% on an annual basis.
The company currently has a forward P/E ratio of 7.62. In comparison, its industry has an average forward P/E of 11.90, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.93 billion. In the past year, its shares have risen 17.5%.
MUSA currently pays a dividend of $1.52 per share, or 0.48% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $497.37 million. In the past year, its units have risen 167.4%.
The partnership currently has a forward P/E ratio of 4.33. In comparison, its industry has an average forward P/E of 15.80, which means NGL is trading at a discount to the group.